Restaurants

More stories

  • 138 Shares189 Views

    in Economy

    It Could Be a Great Year, if Your Business Survives Winter

    by

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesVaccination StrategiesVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyIt Could Be a Great Year, if Your Business Survives WinterTough sacrifices may still be required, but many see a post-pandemic resurgence in the year ahead.Maria Rodriguez mopped the front entry at the Hampton Inn & Suites Herndon-Reston in Herndon, Va., which has seen a significant decrease in guests since the pandemic began.Credit…Alyssa Schukar for The New York TimesNelson D. Schwartz and Jan. 11, 2021, 10:46 a.m. ETFor Ashlie Ordonez, owner of the Bare Bar Studio, a spa in Denver, vaccinations for the coronavirus can’t come soon enough. While she anticipates better days later this year, surviving until then will be a struggle, and she knows the next few months will be lean ones.“I sold my wedding ring so we could pay the bills and keep the doors open,” she said. “I’m sacrificing everything to make it through this pandemic.”Vinay Patel, who manages a chain of nine hotels in Maryland and Virginia, is looking even further out for a recovery: “2022 is when we’ll see the real true potential of the vaccine.” Mr. Patel added that his biggest hope for the coming year is a measure of stability, if not prosperity.As 2021 begins, business owners big and small confront a rapidly shifting landscape. An end to the pandemic is in sight as inoculations begin, but the slow pace of vaccinations has delayed the turnaround they were counting on. Hanging on is the chief goal for many, even as others look ahead to what they consider to be an inevitable rebound.This year “is not going to be a walk through the park, but I’m optimistic,” said Jimmy Etheredge, chief executive for North America at Accenture, the strategy and consulting company. “The eggs are in the vaccine basket.”Even as he anticipates a turnaround, Mr. Etheredge emphasized that many of the changes wrought by the pandemic, such as working remotely and a shift to cloud technology by companies, are here to stay.“Ten months of pandemic has accelerated technological change by 10 years,” he said. “We’re never going to go back to the way things were before.”In the meantime, it’s clear that there will be winners and losers this year. Restaurateurs, leisure and hospitality businesses and the travel industry will continue to struggle as a surge in Covid-19 cases prompts renewed lockdowns in many parts of the country. Few expect imminent salvation.The biggest companies, on the other hand, are positioning themselves for what could be a surge in consumption when the pandemic recedes. Technology, manufacturing, health care and some other industries are booming.Indeed, the contrast was evident last week as major stock indexes notched new highs even as the Labor Department reported that the economy lost 140,000 jobs in December. It was the first decline in months, with the leisure and hospitality sector alone losing half a million positions as lockdowns are enacted.“There is light at the end of the tunnel,” said Brian Moynihan, chief executive of Bank of America. “But there’s a side of the economy that’s still in trouble. There’s a group of Americans who want to go to work but can’t because work isn’t open.”Mr. Moynihan said he was pleased that the $900 billion pandemic relief package was passed and signed into law after many fits and starts, and he favors more stimulus if necessary. Roughly 19 million workers are collecting unemployment benefits, and the employment picture remains bleak for many lower-wage workers in the service economy.Ashlie Ordonez, owner of the Bare Bar Studio, a spa in Denver.Credit…Benjamin Rasmussen for The New York Times“I sold my wedding ring so we could pay the bills and keep the doors open,” she said.Credit…Benjamin Rasmussen for The New York TimesPresident-elect Joseph R. Biden Jr. signaled Friday that trillions of dollars’ worth of fresh stimulus could be on the way, and the imminent Democratic control of the Senate makes that much more likely.As trying as the next few months seem, the economy is in better shape than in the months after Covid-19 first struck, when unemployment soared to 14.8 percent. The jobless rate in December stood at 6.7 percent.Holiday spending by Bank of America customers was 2.5 percent higher than last year, and account holders actually have more in savings than they did before the pandemic. “There’s a bunch of sectors that are doing very well in terms of profits,” Mr. Moynihan added.Even so, these remain times of limbo for many executives and business owners, when the old rules no longer apply but the post-pandemic reality has yet to materialize.The Coronavirus Outbreak More

  • 125 Shares159 Views

    in Economy

    27 Places Raising the Minimum Wage to $15 an Hour

    by

    AdvertisementContinue reading the main storySupported byContinue reading the main storyOnce a Fringe Idea, the $15 Minimum Wage Is Making Big GainsThe new year brings another round of increases, nearly a decade after workers started campaigning for higher pay.Demonstrators calling for a $15 minimum hourly wage outside a Marriott hotel in Des Moines in 2016. Credit…Gabriella Demczuk for The New York TimesDec. 31, 2020, 5:34 p.m. ETIt started in 2012 with a group of protesters outside a McDonald’s demanding a $15 minimum wage — an idea that even many liberal lawmakers considered outlandish. In the years since, their fight has gained traction across the country, including in conservative states with low union membership and generally weak labor laws.On Friday, 20 states and 32 cities and counties will raise their minimum wage. In 27 of these places, the pay floor will reach or exceed $15 an hour, according to a report released on Thursday by the National Employment Law Project, which supports minimum-wage increases. The movement’s strength — a ballot measure to increase the minimum wage in Florida to $15 by 2026 was passed in November — could put renewed pressure on Congress to increase the federal minimum wage from $7.25 per hour, where it has been since 2009. President-elect Joseph R. Biden Jr. has endorsed $15 an hour at the federal level and other changes sought by labor groups, like ending the practice of a lower minimum wage for workers like restaurant workers who receive tips.But even without congressional action, labor activists said they would keep pushing their campaign at the state and local levels. By 2026, 42 percent of Americans will work in a location with a minimum wage of at least $15 an hour, according to an Economic Policy Institute estimate cited in the NELP report.“These wages going up in a record number of states is the result of years of advocacy by workers and years of marching on the streets and organizing their fellow workers and their communities,” said Yannet Lathrop, a researcher and policy analyst for the group.The wage rates are increasing as workers struggle amid a recession caused by the coronavirus pandemic that has left millions unemployed.“The Covid crisis has really exacerbated inequalities across society,” said Greg Daco, chief U.S. economist for Oxford Economics. “This has given more strength to these movements that try to ensure that everyone benefits from a strong labor market in the form a sustainable salary.”Workers during the pandemic have been subject to furloughs, pay cuts and decreased hours. Low-wage service workers have not had the option of working from home, and the customer-facing nature of their jobs puts them at greater risk for contracting the virus. Many retailers gave workers raises — or “hero pay” — at the beginning of the pandemic, only to quietly end the practice in the summer, even as the virus continued to surge in many states.“The coronavirus pandemic has pushed a lot of working families into deep poverty,” said Anthony Advincula, director of communications for Restaurant Opportunities Centers United, a nonprofit focused on improving wages and working conditions. “So this minimum wage increase will be a huge welcome boost for low-wage workers, especially in the restaurant industry.”Mary Kay Henry, international president of the Service Employees International Union, said the labor movement would make getting even more workers to $15 an hour or more a priority in 2021.“There’s millions more workers who need to have more money in their pockets,” she said, adding that the election of Mr. Biden and Vice President-elect Kamala Harris would bolster the effort. “We have an incredible opportunity.”Because many hourly service workers are Black, Hispanic, Native American and Asian, people of color stand to gain the most from minimum-wage increases. A 2018 study from the Economic Policy Institute found that workers of color are far more likely to be paid poverty-level wages than white workers.“It’s the single most dramatic action to create racial equality,” Ms. Henry said.Some economists say lifting the minimum wage will benefit the economy and could be an important part of the recovery from the pandemic recession. That is partly because lower-income workers typically spend most of the money they earn, and that spending primarily takes place where they live and work.Kate Bahn, director of labor market policy at the Washington Center for Equitable Growth, said that after the 2007-9 recession, growth was anemic for years as pay stagnated and the job market slowly clawed its way back.A shopkeeper in Los Angeles waited for customers. Business groups say increasing the minimum wage can hurt small businesses, already beleaguered by the coronavirus pandemic.Credit…Philip Cheung for The New York Times“There’s been a broader acknowledgment that the lackluster wage growth we’ve seen in the past 30 years and since the Great Recession reflects structural imbalances in the economy, and structural inequality,” Ms. Bahn said.Many business groups counter that increasing the minimum wage will hurt small businesses, already beleaguered by the pandemic. More than 110,000 restaurants have closed permanently or for the long term during the pandemic, according to the National Restaurant Association.Increasing the minimum wage could lead employers to lay off some workers in order to pay others more, said David Neumark, an economics professor at the University of California, Irvine.“There’s a ton of research that says increasing minimum wages can cause some job loss,” he said. “Plenty workers are helped, but some are hurt.”A 2019 Congressional Budget Office study found that a $15 federal minimum wage would increase pay for 17 million workers who earned less than that and potentially another 10 million workers who earned slightly more. According to the study’s median estimate, it would cause 1.3 million other workers to lose their jobs.In New York, State Senate Republicans had urged Gov. Andrew M. Cuomo, a Democrat, to halt increases that went into effect on Thursday, arguing that they could amount to “the final straw” for some small businesses.While increases to the minimum wage beyond a certain point could lead to job losses, Ms. Bahn of the Washington Center for Equitable Growth argued that “we are nowhere near that point.”Economic research has found that recent minimum-wage increases have not had caused huge job losses. In a 2019 study, researchers at the Federal Reserve Bank of New York found that wages had increased sharply for leisure and hospitality workers in New York counties bordering Pennsylvania, which had a lower minimum, while employment growth continued. In many cases, higher minimum wages are rolled out over several years to give businesses time to adapt.Regardless of whether there is federal action, more state ballot initiatives will seek to raise the minimum wage, said Arindrajit Dube, an economics professor at the University of Massachusetts Amherst.“At a basic level, people think that this is an issue of fairness,” Mr. Dube said. “There’s broad-based support for the idea that people who are working should get a living wage.”Jeanna Smialek More

  • 163 Shares169 Views

    in Economy

    How May We Serve You? For Restaurant Chains, It Depends on the Location

    by

    AdvertisementContinue reading the main storySupported byContinue reading the main storyHow May We Serve You? For Restaurant Chains, It Depends on the LocationLarge dine-in chains are finding it difficult to enact uniform approaches to the pandemic when dealing with different regulations across the country about how they can operate.With 43 locations scattered across the United States, Fogo De Chão has been dealing with a patchwork of pandemic regulations. At this location, in Rosemont Ill., only two panels of an outdoor structure must be kept open.Credit…Lyndon French for The New York TimesJulie Creswell and Dec. 18, 2020, 5:00 a.m. ETExecutives at the Brazilian steakhouse chain Fogo de Chão thought they had seen the worst of it.Earlier in the year, when seemingly each hour brought news of another city or state abruptly shutting down because of the pandemic, executives switched from email to the messaging system WhatsApp to communicate in real time with the general managers of their 43 U.S.-based restaurants scattered around the country.“The first time we heard a state issue a stay-at-home order we were like, ‘What does that mean? What are they talking about?’” said Barry McGowan, the chief executive of Fogo de Chão. “Then it was like dominoes falling. Boom. Boom. Boom.”Communicating with vendors was hit or miss. Trucks full of food pulled up to restaurants that had been closed.The restaurant chain created a takeout menu in just three days. It reached out to landlords to negotiate breaks on its leases. And as orders to stay closed were lifted, it spent about $1 million renting tents and other equipment to set up outdoor dining at many of its restaurants where indoor dining was still restricted.For a while, it worked. Diners flocked to the restaurants and spent lavishly. Before the pandemic, Fogo de Chão sold about 500 premium steaks, like Wagyu and Tomahawk rib-eyes, per week. That shot up to 1,300 per week by July.But with virus cases rising again across the country, new restrictions have been placed on indoor and outdoor dining, though they are far from uniform (no indoor dining in Philadelphia, Chicago and New York City, indoor dining curfews in New Jersey and Massachusetts, no restaurant dining at all in much of California). For larger dine-in chains like Fogo de Chão, the ever-changing patchwork of rules poses a particular logistical challenge: How do you come up with a companywide approach when different locations are dealing with their own specific regulations?For a while, Fogo de Chão was selling more premium steaks per week during the pandemic than it had previously.Credit…Lyndon French for The New York Times“What you have is a massive deviation from standard in terms of how a chain is operating restaurant locations in different states, which then requires a whole set of processes and management to make sure that you comply with the regulations,” said Sean Ryan, a partner at Kearney, a consulting firm. “It’s costly and time consuming.”Restaurants must work with local health departments that hand down specific guidance on measures that must be taken to prevent the spread of the virus. Some require outdoor dining tents or structures that have no more than two walls to provide adequate ventilation. Others want three sides of tents to remain open.And just as they did earlier in the pandemic, restaurants are quickly adapting once again, by shifting deliveries of food, alcohol, linens and other products from locations that are temporarily closed to ones that remain open. Some are doing the same with personnel.“Restaurateurs are in a state of despair,” said Phil Kafarakis, an industry analyst and the former chief innovation officer for the National Restaurant Association. “People are in total panic mode right now and are starting to take drastic measures to continue to survive.”The restaurant industry has been clobbered by the coronavirus pandemic this year. By some estimates, nearly 110,00 restaurants have permanently closed and 2.1 million employees remained unemployed as of October. Several large casual and upscale dining chains like Chuck E. Cheese, California Pizza Kitchen and some Il Mulino restaurants spiraled into bankruptcy.The new restrictions come at a rough time since the holiday season is typically the busiest period for the industry.Some local health departments require restaurants to set up outdoor dining tents or structures that have no more than two walls. Others want three sides of tents to remain open.Credit…Lyndon French for The New York TimesMaggiano’s Little Italy chain, which operates over 50 restaurants in the United States, typically would be filled with company parties and family celebrations at this time of year.Business & EconomyLatest UpdatesUpdated Dec. 18, 2020, 7:11 a.m. ETStocks close the week on an uncertain note.Catch up: Coinbase files for initial public offering.Restaurant chains are finding it difficult to navigate differing regulations.But because of various dining restrictions, 2020 would be different, executives at Brinker International, which owns Maggiano’s and Chili’s Grill and Bar, warned Wall Street analysts in September. “Our anticipation right now is we won’t see that same similar environment playing out,” said Joe Taylor, Brinker’s chief financial officer. This week, Brinker withdrew its guidance for the quarter as a number of its locations were again shut down.Still, in many ways, the large dine-in chains are better positioned for the new restrictions than they were in the spring.“There were so many unknown variables during the springtime,” said R.J. Hottovy, an analyst at the consulting firm Aaron Allen & Associates. “This time around, restaurant operators had a specific game plan in place.”Left with empty dining rooms, casual and upscale dining chains moved quickly to beef up or offer to-go options the first time around. They launched curbside pickup and signed on with food delivery partners like DoorDash and Grubhub. Some states loosened liquor laws, allowing chains to offer alcoholic beverages for takeout. And when restaurants were allowed to serve diners again, with restrictions, many rented tents or opened up patios to create outdoor seating.But chains saw uneven performance among their restaurants.By the end of summer, Olive Garden restaurants were averaging $70,000 in sales per week. But sales at the chain’s superstar restaurant in Times Square in New York, which was offering only takeout during the summer, plummeted to $17,500 per week, down from roughly $288,000 per week, executives of Darden Restaurants, which owns Olive Garden, LongHorn Steakhouse and The Capital Grille, told Wall Street analysts in September.Sales at the Olive Garden in Times Square plunged to $17,500 per week during the summer, when it was serving only takeout, down from roughly $288,000 per week.Credit…Gabby Jones for The New York TimesDarden’s stock, along with that of many restaurant companies, bounced back this fall and winter, partly on the success many have had in offering to-go or outdoor dining, as well as the expectation that diners will return in droves to eating out once vaccines become widely available in the United States.“Chain restaurants, like humans, are amazingly adaptable entities,” said Mr. Ryan of Kearney.Indeed, just a few weeks ago, the caipirinhas flowed freely and $135 Wagyu rib-eye steaks sizzled as they were delivered to diners under a tent at the Beverly Hills location of Fogo de Chão. The location was the chain’s busiest, but many of its other restaurants were also rebounding strongly.By early November, the chain, which in based in Plano, Texas, and was acquired in 2018 by the investment firm Rhone Capital, was making 93 percent of the revenues it had made at the same time last year and had hired back about 90 percent of the employees who had been furloughed earlier in the year. Sixteen of its restaurants located largely in states with fewer dining restrictions were seeing higher sales than those last year.But as states have put in new restrictions, Fogo de Chão has gone back to its earlier playbook. It is moving food around and a few weeks ago reached out again to landlords to negotiate lease payments.Many large chains, including Olive Garden, saw uneven performance among their restaurants during the pandemic.Credit…Gabby Jones for The New York TimesThe once-bustling tent in Beverly Hills sits empty after health officials shut down outdoor dining in Los Angeles County for three weeks. About 2,300 miles away in a suburb of Detroit, another tent sits empty. Fogo de Chão had to remove three sides of the tent, per local health regulations, and now has to figure out a way to add barriers to block the freezing winds.But inside a cozy “Winter Wonderland”-themed tent in Rosemont, Ill., a suburb of Chicago, where restaurants need only two side panels open, customers are able to nosh on shrimp cocktails and sip on bottles of South American wine every night as they sit around heaters and under twinkling lights with Christmas music spilling through speakers.In an effort to keep as many workers employed as possible, Fogo de Chão is offering to shift some employees from locations that are temporarily closed to ones that are thriving, including those in Las Vegas, Orlando, Dallas and Rosemont.“Our goal is to keep our employees employed through the holidays,” Mr. McGowan said. “Our hope is that in January we can open up our patios and tents in parking lots again. And then, the vaccine will come and hopefully, by March or April, we’re back to some sort of normal.”AdvertisementContinue reading the main story More

  • 88 Shares129 Views

    in Economy

    DoorDash Stock Soars After Initial Public Offering

    by

    AdvertisementContinue reading the main storySupported byContinue reading the main storyDoorDash Soars in First Day of TradingThe delivery company’s shares closed at $190 each, 86 percent above its initial public offering price of $102, in a sign of investor appetite.The New York Stock Exchange president, Stacey Cunningham, rang the opening bell as DoorDash celebrated its initial public offering on Wednesday.  Credit…NYSEDec. 9, 2020SAN FRANCISCO — Wall Street loves a pandemic winner.Shares of DoorDash soared in their first day of trading on Wednesday, capping a year of outsize growth for the country’s largest food delivery company. DoorDash stock rose 86 percent above its initial public offering price of $102 to close the day at $189.51.That valued the company at $72 billion, including employee-owned shares — more than the market capitalization of Domino’s Pizza and Chipotle Mexican Grill combined. DoorDash raised $3.4 billion, making it the one of the largest I.P.O.s of the year.Investors piled into the stock despite DoorDash’s deep losses and the intensely competitive market in which it operates. In the week before it went public, DoorDash raised its proposed price range 16 percent to $92.5 per share at the midpoint before pricing even higher. The pandemic has been a boon to the company, as people turned to delivery services while stuck in their homes.Tony Xu, the chief executive of DoorDash, said the company would try not to “chase the scoreboard” and the stock market hype as a public company. “I recognize the significance of the milestone and the moment, but it is one day on this multidecade journey,” he said.DoorDash’s listing heralds a banner week of public offerings for technology start-ups. Airbnb priced its offering on Wednesday at $68 a share, according to people with knowledge of the matter. The home rental company had raised its offering price range once, in the face of high demand, and could be valued at $47 billion, far above its $18 billion valuation in the private market this year. It will begin trading on Thursday.The e-commerce start-up Wish, the video gaming company Roblox and the real estate start-up OpenDoor also plan to list their shares before the end of the year. The events are set to deliver windfalls to the companies’ founders, employees and investors in what is expected to be the busiest year for I.P.O.s since 1999. More than 200 companies valued at more than $50 million have gone public so far this year, according to Renaissance Capital, which tracks I.P.O.s.Many of these companies lose money. Even so, investors have largely given them warm welcomes as they go public. Private investors valued Snowflake, a data warehousing company, at $12 billion before it went public in September. Since then, its valuation has soared to $107 billion.“It’s been 20-plus years since we’ve seen this many I.P.O.s,” said David Hsu, a professor of management at the University of Pennsylvania. But he added a cautionary note about the enthusiasm. “At some point, we do have to look at some fundamentals,” he said.DoorDash’s debut also shows the extreme economic disparities created by the pandemic. Restaurants, struggling to survive government-mandated closures, have increasingly relied on delivery apps like DoorDash to stay in business.DoorDash has grown during the pandemic as more people turn to meal deliveries.Credit…Sean Sirota for The New York TimesThe apps, which dispatch armies of gig workers to pick up and deliver orders, charge fees that some restaurant owners have said are onerous. In many cases, takeout orders have not made up for the lost revenue of indoor dining. Chains including Ruby Tuesday, California Pizza Kitchen and the parent company of Chuck E. Cheese have gone bankrupt this year.But DoorDash has thrived. In the first nine months of the year, its revenue more than tripled from the same period last year, to $1.92 billion. Orders surged to 543 million through September, compared with 181 million a year earlier.Ahead of its I.P.O., DoorDash announced a $200 million pledge to various programs to help restaurants and delivery drivers. It invited a number of restaurant owners and delivery drivers to virtually attend the stock market opening bell ringing and featured them in outdoor marketing campaigns around New York and San Francisco.Despite its rapid growth, DoorDash is burning cash. It lost $149 million in the first nine months of the year and warned investors that the pandemic-spurred growth was likely to slow down.Mr. Xu said the company would continue to spend money to grow “commensurate with the opportunity.”Mr. Hsu said DoorDash’s “astonishing” valuation made him think investors had overemphasized the effects of the pandemic.“When you get to this market cap level, there are questions about where do you go from here?” he said.DoorDash recently won a long-fought battle over its use of contract workers. Last month, Californians passed Proposition 22, a ballot measure that exempts DoorDash, Uber, Lyft and others from a state law that would have required them to treat their drivers as employees. The companies are expected to push for similar rules in other states.Tony Xu, DoorDash’s chief executive, said the company would not focus on the market hype. “I recognize the significance of the milestone and the moment, but it is one day on this multidecade journey,” he said.Credit…Jim McAuley for The New York TimesDoorDash has grown, in part, by focusing on suburban markets and partnerships with large chain restaurants. Founded in 2013 by Mr. Xu, Stanley Tang, Andy Fang and Evan Moore, it survived a ruthlessly competitive market for longer than many of its competitors. This year, two players, Grubhub and Postmates, were acquired by larger rivals.Through the deal-making, DoorDash has remained independent. It counts one million drivers and 18 million customers in the United States, Canada and Australia.The company has experimented with different business models, including a subscription service, DashPass, which costs $9.99 a month for unlimited deliveries. DashPass has five million subscribers.DoorDash began operating commissary buildings where restaurants can rent space and prepare food specifically for deliveries. It has struck partnerships with grocers, pet food companies and drugstores. The company even invested in Burma Bites, a local restaurateur.The succession of tech I.P.O.s provides long-awaited returns to venture capital investors. Many of the companies going public are a decade old. Plentiful venture funding has allowed “unicorn” start-ups, worth $1 billion or more, to put off going public, and with it the pressure to turn a profit, for as long as possible.Sequoia Capital, which has backed Airbnb, DoorDash, Snowflake and several other sizable start-ups going public this year, is expected to reap a bonanza. So is Founders Fund, a venture firm that is a large shareholder in Airbnb and Wish. And the Japanese conglomerate SoftBank, which was bruised by bad bets on the office rental company WeWork and others, could be redeemed by its investments in DoorDash and OpenDoor.Matt Phillips contributed reporting.AdvertisementContinue reading the main story More